Four value-creation areas
When working on data strategies, we view and ideate the possible data value opportunities through four areas, at the early stage of the process. The goal is to think about new opportunities where data could provide business value in a holistic manner. Taking into account organization’s internal and external perspectives.
The first of these areas is about using data to improve efficiency and core business processes. How can data make business operations more efficient, and how can the predictability of the future be improved?
Secondly, we look at opportunities to develop new data-driven products, services, and offering. A better understanding of the ecosystem and what the customers need help to identify also new opportunities to provide for example additional data-driven services that customers are willing to pay fore and complement the existing offering.
Third area is about monetizing data, the opportunities to sell and exchange data and insights. Maybe there is some data or an insight that other organizations are willing to pay for and selling it would create benefit to our organization as well?
And the fourth one looks into ecosystems. How could data be used to catalyze those ecosystems the organization is part of. Perhaps innovating with the data for the benefit of the ecosystem. Or combining data of different ecosystem partners and creating a new, valuable insight.
While preparing myself for the upcoming Solita Meeting Point 2022 I came to think about how we might be able to use these same areas to shape a data strategy that boosts sustainability. As data plays a significant role in digitalization, and digitalization is critical tool to boost sustainability.
Environmental, societal and economic sustainability
So what exactly is sustainability? We often organize our thinking on sustainability into three dimensions: environmental, societal and economic.
Environmentally, sustainability primarily relates to climate impact. It seems more and more undeniable that past and current human progress on the planet is not environmentally sustainable and thus needs to be transformed. Securing biodiversity, reducing use of resources through a longer lifetime of products, recycling material and significantly reducing carbon emissions are the most visible activities.
Societal sustainability revolves around topics such as inclusion and diversity (across several vectors: gender, age, ethnicity, etc.) as well as ethics and sovereignty. How we understand and use data ethically and transparently will have a big impact on these.
Our societies are no longer divided across traditional lines such as developed vs developing countries or democratic vs autocratic regimes. A new division between digitally mature vs digitally immature societies is emerging. And the ways societies respond to the transformative potential of a globally oriented digitalization have tremendous implications for sustainability. Resources will be required to manufacture devices and energy to use them.
In economic terms, sustainability can be thought of in terms of debit and credit. And any business practice, human behavior or society can be thought of as a set of transactions incurring either debit or credit on the planetary account ledger.
Any practice predominantly incurring credit without a clearly defined debit down the road is not an investment.
It’s a non-sustainable, non-scalable, and simply non-viable practice. Resource-demanding linear business practices such as non-renewable food packing (such as wrapping single pieces of organic fruits or vegetables in plastic) are not sustainable. Circular business practices discounting food items soon to perish and offering these through digital platforms are. We need to drastically rethink the currently established business models and value chains.
Overall, sustainability is about finding ways for us humans to co-exist on this planet. And not just co-exist but do that safely, meeting our needs without compromising the future generations to also do so.
Data as an accelerator for sustainability
As digitalization, and data especially, provide critical tools to combat the climate crisis, it will be essential to not only think about utilizing data to ensure profitability and growth but to think about ways to accelerate the activities that create sustainability. Do join our Solita Meeting Point to hear some great examples about these.
Digitalization creates the opportunity to capture comprehensive amounts of data about our business operations, how people (customers, employees, business partners) interact with digital tooling, and measure events and situations around us (with sensors, etc.).
How we then use this data, is what makes the difference.
We can use the previously introduced four value-creation areas to identify new potential to boost sustainability. Here are some ideas:
- How can data be used in the core business processes to increase the sustainability of business operations? Capturing data throughout the manufacturing process and providing carbon footprint as a data service for own internal development but also for business partners and the ecosystem. This has the potential to also increase the brand value. And create a significant impact on the whole ecosystem’s sustainability.
- What about the opportunities to create new products and services? Could the data be used to provide additional services complementing the existing products, that boost sustainability? Such as helping the customer to use the product for longer and maybe with less energy. Could there be a new customer need that could be solved with data? Data could be used to better understand why customers return products or if they are creating more waste than value to the customer, maybe there would be a need for a different type of business model, such as renting instead of buying.
- How about monetizing data and insights? Are there such insights or maybe algorithms developed that would be so valuable for other organizations they would be willing to pay for those? Maybe something created for its own business process sustainability could be sold to other companies as well. Gaining revenue and impacting more organizations becoming more sustainable.
- How could data help the catalyst business ecosystem? Or maybe there are new ecosystems to be formed or join? One might publish some data freely available, which could boost the innovation of new solutions. Or maybe sharing raw material-, or other data from the process with partners in the ecosystem to create something new together?
Has your organization considered how you can use data to boost your sustainability? Is it built on your organization’s data strategy?
Interested to learn more about how Solita is supporting clients to shape their data strategy? Check out What is a data strategy and why do you need one – Solita